Accelerating Innovation for a Better World

August 01, 2013

It was a long and arduous legislative session in Washington state (167 days) but finally House and Senate legislators and the Governor came to an agreement on the operating budget for the next 2013-15 biennium. It is with great regret that funding for the Washington Economic Development Commission (WEDC) is eliminated. Furthermore, the STARS and Entrepreneurs in Residence program which the commission shepherded with outstanding results is also eliminated. The WEDC will no longer have an independent full time staff. The strategy, oversight and performance evaluation functions of the WEDC will be absorbed by the Department of Commerce. Modest transition funding of $75K is provided for convening a working group of former commissioners and Associate Development Organizations (ADOs) to address specified tasks.

The WEDC leadership worked hard at making the case that a non-partisan, public-private forum with an impartial view was worthy of continued state support. We emphasized the value of the private sector working jointly with the state's leading policymakers in shaping a long-term and cohesive economic growth strategy, establishing benchmarks for performance accountability and ensuring rigorous data standards for evaluating economic development programs, taxes and regulations. Many legislators appreciated the merits of an independent entity championing these values and goals—but in the end other priorities prevailed in budget deliberations.

It has been an honor to work with a fantastic group of commissioners in building a forward-looking strategy, organizing numerous innovation conferences and events, preparing research reports, managing policy development and engaging hundreds of business, education, and civic leaders in our priority-setting process. We covered every latitude and longitude of this wonderful state. Collectively we designed a potent policy framework for talent development, innovation and entrepreneurship, infrastructure, regulatory efficiency and international business. I am confident many elements of this policy framework will endure and help guide policymakers in the future.

We played a central role in designating 15 Innovation Partnership Zones across Washington State. The IPZ program garnered recognition as a best practice by the National Governors Association and in a national competition won a first place Innovation Award from the Council of State Governments. This bottom-up and essentially no-cost initiative has leveraged millions of federal, state and private sector resources for their unique innovation focused strategies.

Through our Entrepreneurs-in-Residence program dozens of new start-up companies were launched commercializing the intellectual capital of the University of Washington and Washington State University. The STARs program guided by the Innovation Advisory Committeeprovided the critical seed funding for recruiting world class entrepreneurial researchers and enabled the establishment of two outstanding research commercialization centers: Bio- products, Sciences and Engineering Laboratoryand the Energy Systems Innovation Center.

It was an impressive team effort facilitated greatly by the stewardship of Roger Woodworth (chair), Bruce Kendall (former chair) and Steve VanAusdle (vice-chair). I also salute my superb and productive staff—especially the amazing operational skills of Noreen Hoban who has been with me since the beginning and Spencer Cohen who set the bar for high quality analysis and rigorous standards for evaluation.

As the next steps are undertaken for the state's economic development, we should refresh our pledge to make Washington the leading birthplace of innovation and world changing ideas, business models, products and services. An enduring public-private commitment to action will be essential for this vision to be realized.

It has been a great honor and privilege to be of service to Washington State.

March 15, 2013

Washington State can accelerate job growth and become the leading innovation hotspot of the world. So concludes the Washington Economic Development Commission's final report, Driving Washington's Prosperity -- A Strategy for Job Creation and Competitiveness.

In accepting the commission's report, Governor Inslee observed: "This is a new era for economic development, an era where embracing innovation, inclusiveness and accountability brings out the best in us." He added, "I appreciate the Commission's efforts to set this foundation for our state's future economic opportunity, jobs and quality of life."

In short, the plan offers a roadmap for the state to differentiate itself, attract new investment and help grow family wage jobs. According to Commission chairman Roger Woodworth, "Growth is stronger when resources are leveraged for impact and aligned with a cohesive policy framework. A focus on fundamentals, coupled with leadership and a long view, will yield a more resilient economy for our state," he said.

Among the Commission's findings, the state's substantial economic development efforts have tended to be short-term, narrowly focused, and rarely coordinated across agencies. Commission Executive Director, Egils Milbergs observed that, "Rigorous evaluation of economic development programs is infrequent, limiting the evidence policy makers and taxpayers need to judge performance. We can and must do better if we're to unleash creativity, accelerate job growth, and secure our technological leadership over foreign competitors."

The Commission's report advances a strategy to overcome this fragmented approach to economic development, identifying five key drivers for ensuring job creation and competitiveness:

Make talent a top priority

Invest in entrepreneurship

Connect through reliable infrastructure

Regulate in the smartest ways

Expand international business

The report includes an analysis of the State's competitive strengths (such as in research and development, patent production, technology jobs growth, venture capital investment, manufacturing and exports) and weaknesses (such as in the rate of jobs recovery particularly in rural regions, in-state production of scientists and engineers, workforce skills, household income, investment in transportation infrastructure and foreign direct investment).

The Commission prepares the legislatively authorized report every other year. This year's plan is the result of multi-stakeholder dialogue among leaders in business, education, labor, economic development, and government. More than 650 stakeholders participated at 15 regional strategy forums.

Below are links to the strategy report and the series of evaluation reports to inform the plan and economic development mission of the State.

The Washington Economic Development Commission (WEDC) is an independent, non‐partisan commission established to assist the governor and legislature by providing leadership, direction, and guidance on a long‐term and systematic approach to economic development that will result in enduring global competitiveness, prosperity and economic opportunity for all the state's citizens. For more information on the state's economic development strategy, policy reports, meeting schedules and status of recommendations visit Washington Economic Development Commission at www.WEDC.wa.gov.

September 04, 2012

Egils Milbergs, executive director, Washington Economic Development Commission (WEDC) previewed the state economic development strategy before manufacturing executives at a July 26thCenter for Advanced Manufacturing Puget Sound (CAMPS) meeting in Kent, WA. The draft final strategy report was approved for public review. A road tour and series of community economic development forums are planned for August and September. The final report is expected to be completed before the end of the year. DOWNLOADS:

February 02, 2012

Despite the official end of the recession, the economy recovery remains excruciatingly slow and Washington state is still more than 100,000 jobs in the hole. The overarching imperative is clear.We must urgently learn more, create more, make more and export more. Innovation will be the key driver in accelerating economic recovery. Four pillars underpin a 21st century innovation economy: talent, investment and entrepreneurship, infrastructure and exports.Getting the economy back on a sustainable path will take extraordinary leadership from the private sector and every level of government—federal, state, local and tribal.Our new commissioners are in the process of updating the state’s economic development strategy and, in parallel, conducting an in-depth outcome evaluation of over 124 agency economic development programs.

To create jobs Washington must set itself apart and make our state the most attractive environment for innovation in the world.We invite your thoughts as we move forward.LINK: www.wedc.wa.gov

July 14, 2010

The Pacific Northwest region is a case study on creating the world's largest science and innovation ecosystem. In a special presentation at the Greater Seattle Chamber of Commerce, CEO Roundtable, Egils Milbergs highlighted the work of an 18 member public-private commission focused on transforming the Washington state’s economy to be more creative, open and collaborative. He discussed the dynamics of government, business, academia and philanthropy in bringing about this change. He presented a new public-private model for driving Washington's economic future and the requirements for economic recovery and job creation. These topics will be integrated into the foundation for the next update of the State's long term economic development strategy and action recommendations to be presented to the Governor, legislature, congressional delegation and public later this fall. LINK to presentation slides: Download Egils Milbergs 1.5 Final Seattle Chamber of Commerce July 13 2010

Egils Milbergs is the executive director of the Economic Development Commission of Washington State. The Commission is charged with developing a long term economic development strategy and making the state the most innovative region in the world. He was appointed by Governor Chris Gregoire on January 23, 2008 after a nation-wide search. He is a noted thought leader in competitiveness policy and champions the vital importance of US technological, manufacturing and innovation leadership to long-term prosperity. In Washington State he is advancing the concept and practice of regional innovation ecosystems. He held previous positions as president and founder of the Center for Accelerating Innovation, president of the National Council for Advanced Manufacturing, president of the Institute for Illinois, Deputy Assistant Secretary for productivity, technology and innovation for the U.S. Commerce Department, and executive director the President's Commission on Industrial Competitiveness.

January 22, 2008

Mike Mandel, Business Week chief economist, comments on the Commerce Dept. Advisory Committee report: Innovation Measurement: Tracking the State of Innovation in the American Economy. It recommends new yardsticks for measuring growth and the contribution of innovation.

January 19, 2008

Commerce Secretary Carlos M. Gutierrez announced January 18 steps for the federal statistical agencies and others to work to explain and quantify one of the largest and most elusive drivers of the economy—innovation. Among the innovation measurement initiatives announced were comprehensive accounting of the effect of high-tech goods and services, measuring the increase in productivity due to increased investments in innovation, and expanding collection of data on innovation.

Secretary Gutierrez announced these measures based on a report by the Advisory Committee on Measuring Innovation in the 21st Century Economy. Committee members are CEOs and prominent academics who worked over the past year to develop innovation metrics.

“Innovation has proven an essential driver of growth for the U.S. economy,” said Secretary Gutierrez. “Thanks to the leadership of the committee and Chairman Carl Schramm, we now have a well-informed framework for moving forward and ensuring that we as a nation foster innovation and its contribution to a healthy 21st Century economy.”

“While we recognize that the American economy is changing in profound ways—mostly due to innovation—our understanding is minimal,” commented Chairman Carl Schramm. “Data collection and measurement loom large in helping us to understand these changes and to identify and replicate what we’re doing well.”

Here are some of the key recommendations.

-The Bureau of Economic Analysis (BEA) will work with the Bureau of Labor Statistics (BLS) to provide a comprehensive accounting of the effect of high-tech goods and services on growth and productivity.This will set the stage for the development of integrated estimates for major sectors and detailed industries. Although total factor productivity growth is not a direct measure of innovation, correctly capturing productivity at the sectoral level will greatly improve our understanding where innovation occurs.

-BEA will design a supplemental innovation account by January 2009. This account will be a framework for directly measuring how much of the overall increase in productivity is due to increased investments in innovation. It will include investments in intellectual property (including patents, copyrights, and trademarks) and in human capital. In addition to directly measuring the impact of innovation on growth, such a measure would take into account the fact that knowledge, just like other property, is wealth—and those policies that increase knowledge increase the wealth of our society.

-Building on their successful efforts in developing measures of the impact of R&D on GDP growth, partners at the National Science Foundation are asked to maintain and expand their commitment and effort to the collection of data on research and development and innovation-related inputs. These efforts will provide an important piece of the puzzle of what drives innovation in the U.S. economy.

-Recognizing the clear benefits that can be achieved through better statistical coordination and data synchronization, Secretary Gutierrez pledged to work with the Council of Economic Advisors, the Office of Management and Budget, the Departments of Treasury and Labor, and Congress to see whether a framework that meets everyone’s data confidentiality concerns is achievable.

-The Committee members expressed a desire for the dialogue to continue after the release of these recommendations. In particular, the Secretary indicated he would direct the bureaus in Commerce to conduct various workshops on the drivers and impediments to innovation.

January 15, 2008

Members of the National Science Board today delivered to the President and the Congress Science and Engineering Indicators 2008 (SEI'08), the Board's biennial report on the state of science and engineering research and education in the United States. Called the "gold standard," it is the most comprehensive source of information on research and development conducted by universities, industry, the federal government and the international science and engineering enterprise.

The Board also introduced its new publication, Digest of Key Science and Engineering Indicators 2008 containing a selected set of indicators electronically linked with detailed data tables and discussions in the main volumes of SEI. In addition to SEI'08, the Board, concerned that the data revealed disturbing trends with serious policy implications, published a companion piece, Research and Development: Essential Foundation for U.S. Competitiveness in a Global Economy.In this policy statement and in presentations in the U.S. House of Representatives, National Science Board Chairman Steven Beering, Subcommittee Chairman on SEI'08 Louis Lanzerotti and SEI'08 Subcommittee Member Arthur Reilly stressed the need for increased government and industry sharing of funding for basic research.

"These indicators come at an important time," said Chairman Beering. "The confluence of a range of indicators raises key questions about future U.S. high-technology industry's competitiveness in international markets and implications for highly skilled jobs at home."

The Board made three major recommendations:

The federal government should take action to enhance the level of funding for, and the transformational nature of, basic research;

Industry, government, the academic sector and professional organizations should take action to encourage greater intellectual interchange or synergy between industry and academia, with industry researchers encouraged to also participate as authors and reviewers for articles in open, peer-reviewed publications.

New data are critically needed, and this need should be expeditiously addressed by relevant federal agencies to track the implications for the U.S. economy of the globalization of manufacturing and services in high technology industry.

Science and Engineering Indicators 2008 tell a mixed story regarding the achievement of U.S. students in science and math in international comparisons.

U.S. grade school students continue to lag behind other developed countries in science and math, although fourth and eighth grade U.S. students showed steady gains in math since 1990. Only fourth graders showed gains in science compared to 1996.

High school completion and college enrollment rates across ethnic groups increased steadily in recent years. But college enrollment and completion rates differ across socioeconomic groups.

3-4 Science and Technology (S&T) Capabilities and Workforce

The capability to do science and technology work increased throughout the world, and the National Science Foundation is out front tracking the trends.

In 2000, the United States held about one quarter of the world's 194 million tertiary degrees -- degrees broadly equivalent to a U.S. baccalaureate. Twenty years earlier, the U.S. share was closer to one third of the world's then 73 million tertiary degrees.

From 1994 to 2004, U.S. firms increased the number of people they employed in R&D jobs outside the United States by 76 percent and employment within the United States by 31 percent, while U.S. subsidiaries of foreign firms increased their U.S. R&D employment by 18 percent.

5-6 S&T Capabilities - U.S. Research & Development (R&D)

The U.S. is the largest, single, R&D-performing nation in the world supplying an estimated $340 billion for R&D in 2006, a record high.

Of the $340 billion R&D total, basic research accounted for 18 percent or $62 billion; applied research accounted for 22 percent or $75 billion; and development accounted for the other 60 percent or $203 billion. In 2006, the federal government supplied about 60 percent of all basic research funds, industry about 17 percent, with private foundations, academic institutions and other governmental entities supplying the rest.

Federal obligations for all academic research, basic and applied, declined in real terms between 2004 and 2005 and are expected to drop further in 2006 and 2007. This would be the first multiyear decline for academic research since 1982.

7-9 High Technology - U.S. Position

Based on key indicators, the U.S. sustained a relative economic advantage over other developed and developing economies. Growth has been far more rapid in the emerging markets of China and India.

The U.S. is a leading producer in high-tech manufacturing and knowledge-intensive services, but several Asian countries, led by China, have rapidly increased their global market share.

The U.S. leads the world in economically-viable patents, filed in the U.S., Japan and Europe.

The U.S. comparative advantage in exports of high-technology products has eroded: the U.S. trade balance in advanced technology products shifted from surplus to deficit starting in 2002. Information and communications products geographically concentrated in Asia -- particularly China and Malaysia -- account for this deficit.

10-11 Public Support for Science in the U.S.

U.S. public support for government funding of scientific research is strong and growing.

In a 2006 survey, 87 percent of Americans supported government funding for basic research, up from 80 percent in past surveys dating back to 1979. Also, Americans who said the government spends too little on scientific research grew from 34 percent to 41 percent between 2002 and 2006.

In 2006, Americans expressed greater confidence in leaders of the scientific community than those of any other institution except the military. On science-related public policy issues, including global climate change, stem cell research and genetically modified foods, Americans believe that science leaders, are knowledgeable and impartial and ought to be influential.

12-13 Federal Support for Academic Scientists and Engineers

Academic scientists and engineers are more diverse today, and federal funding remains important to them.

From 1973 to 2006, in the academic, doctoral labor force the share of women increased from 9 percent to 33 percent, of underrepresented minorities (African-Americans, Hispanics, and American Indians/Alaska Natives) from 2 percent to 8 percent, and of Asian/Pacific Islanders from 4 percent to 14 percent.

Academic S&E doctorate holders employed in academia who received federal support has remained steady during the last 20 years: just under half, 47 percent in 2006, and in the late 1980s. Among life scientists, this percentage has dropped from 65 percent in 1989, to 58 percent in 2006, although the actual number of those reporting federal support increased.

Egils Milbergs, Center for Accelerating Innovation, commented: "This is an important document for policy makers. Today's Science and Engineering Indicators 2008 report makes clear that the public continues to support higher investment in scientific research. Yet we see in the data an erosion of federal basic research funding and, more disturbing, a relative decline in private sector R&D support of academic research. This raises the question of how to implement the National Science Board recommendation to encourage greater intellectual interchange or synergy between industry and academia. Investing in the scientific talent and technological infrastructure of our overseas rivals appears to be more synergistic to global corporations than here in the US."

January 07, 2008

(www.BigThink.com ) is an on-line beta site launched today for the growing global conversation about where we are and where we're headed. Harvard educated co-founders Victoria Brown and Peter Hopkins germinated the idea for Big Think while working together at PBS on the “Charlie Rose” show in 2006. Taking a cue from elite private institutions and conferences that convene thought leaders from a variety of backgrounds and perspectives to swap ideas about pressing global issues, Big Think is adapting this model to the more egalitarian Web medium. Combining journalistically produced interviews with user-generated content, and playing both moderator and mediator, Big Think is attempting to be a bridge between edited and so-called informed opinion and the less controlled freestyle of online social media – a potentially unique civic engagement platform.

"We live in a global age, and yet there is no central, global forum to exchange, discuss and debate the big issues and ideas of our time", says Big Think co-founder Victoria Brown. "Big Think is a needed social endeavor that will allow an engaged global audience to share the same platform as leading voices from around the world. Big Think is driven by the conviction that this conversation should be open across all geographies, boundaries and jurisdictions - not limited to one class, rank or station."

A formidable group of financial backers who share the founders' vision for raising the quality of media are investing in the project including Peter Thiel (PayPal, Facebook and Clarium Capital), Larry Summers (Former Secretary of the Treasury, Former President of Harvard), Tom Scott (Nantucket Nectars and Plum TV), and Gary David Goldberg (creator of Family Ties and Spin City). David Frankel, South African venture capitalist, is lead investor.

The framework is based on a systematic review of 52 public indicator reports and 95 private sector sources. Our review generated an inventory of 3,126 indicators measuring multiple dimensions of innovative activity. We discovered during our review that no common framework for organizing and presenting such indicators exists. The framework we designed is comprehensive and approaches innovation as a complex and multi-faceted process and recognizes:

both the innovation supply (inputs) and demand (outputs) and the process that connects inputs to outputs and ultimate national impacts.

context in which innovation takes place including the macroeconomic environment, public policies, infrastructure and the national mindset for innovation.

changes in the nature of innovation including globalization of innovative activity, new business models for managing innovation, types of innovation, service sector innovation, entrepreneurial activity and diffusion/adoption rates for innovation.

The framework organizes indicators in four broad domains as illustrated and into 14 specific factors that drive knowledge from original insight to economic impact. Based on a detailed evaluation of these indicators and a workshop we identified a set of baseline indicators from which to evolve innovation vital signs for the national innovation ecosystem. We conclude that currently available indicators and measurement methods do not adequately describe in a timely manner the dynamics of innovation today. Innovation cannot be approached as an isolated inventive activity and linear process. We need to move beyond indicators dominated by inputs such as R&D, scientific and engineering personnel, patents and number of publications. A comprehensive indicator framework is required that can link innovation inputs, processes and outcomes to better reflect the reality of innovation today. Innovation is best viewed an ecosystem of relationships, connections and diverse patterns interaction among individuals and organizations. It is a complex process in which new knowledge eventually becomes embedded into a new products, services, processes and business models that create value. This value creation process in turn generates national benefits and revenue and profit to entities who undertake the risk of being innovators.

Innovation is a process by which value is created for customers through public and private organizations that transform new knowledge and technologies into profitable products and services for national and global markets. A high rate of innovation in turn contributes to more intellectual capital, market creation, economic growth, job creation, wealth, and higher standard of living.

Innovation policy should be based on evidence. Timely, high quality relevant information is available in abundance to support fiscal, monetary and trade policies. Innovation policy for the 21st century will require new indicators, improved data collection and integration methods, and sophisticated visualization tools to understand the more subtle, qualitative and interactive elements of innovation and greater recognition of role innovation plays in the service sector. The framework offered in this report integrates the fundamental change in innovation practices from the previous closed, static, linear and individualistic perspective into a multidimensional, dynamic approach that is capable of staying abreast of the demands of a global economy.

The Innovation Vital Signs conceptual framework identifies 4 domains and 14 innovation factors that collectively interact to create the innovation capacity and performance of a nation. The innovation framework report summarizes the provisional set of indicators that emerged from our global assessment of innovation indicators. Download innovation_vital_signs_framework_report_v.2.8.pdf

[1]The framework builds on the innovation ecosystem concepts and recommendations prepared by Egils Milbergs, Center for Accelerating Innovation for the 21st Century Innovation Working Group of the National Innovation Initiative, Council on Competitiveness. PDF]21st century innovation working group final report , Innovate America Final Report, December 2004. www.compete.org Additional information on the Innovation Vital Signs Project can be found at www.usinnovation.org